When Is Survivorship Life Insurance Appropriate?

All men may be created equally, according to Thomas Jefferson.  However, all life insurance plans are not.

There is only so much that can be said about life insurance.  It is a pretty simple concept.  If you have it when you die, your loved ones get paid.  It is as if money will soften the sense of pain and loss they feel.

Life insurance companies offer many different types.  You can choose between term, whole, universal, adjustable, etc.  They all have different “bells and whistles.”   However, they all do the same thing.  They pay your survivors when you die.

One type of life insurance policy that is not as well-known is called, “Survivorship” or “Second-to-die” life insurance.  It is a specialty product.  Not every insurance company offers it.  It is generally used by married couples who have one of the two needs below.


Both Federal and some State governments have “Estate Laws.”  According to most of those laws, a surviving spouse is allowed to maintain the use of all the assets of the marriage when one spouse dies.  However, a problem arises when the second spouse dies.

The “Estate Laws” only allow a certain amount of value to be transferred to children without having to pay “Estate Taxes.”  The federal government, and some state governments, want to make certain that they get a “fair share” or the wealth you were able to accumulate during your lifetime.  After all, “What good is money or real estate going to do for you and your spouse now that you are both deceased?”

A big problem with many of the “Estate Laws” is that the executor of your estate will only have a small period of time in which to pay the government.  If your estate is made up of real estate, securities or other tangible property, they may need to be sold at less than their true value in order to pay the “tax-man.”

If your estate planning attorney has set up your estate correctly, the benefits from your “Survivorship Life” policy will not be included in your estate for tax and probate consideration.  Most importantly, the money that is paid can be used to pay the “tax-man” so that your children are not forced to sell your property at less than its true value.


I have been fortunate in my life.  I can see,  I can hear, and all my legs and arms work.  I am able to function and care for myself.  I grew up and became self-sufficient.  I was able to leave mom & dad’s home and still thrive.

Unfortunately, that cannot be said about every child.  Some children are blind, some are deaf.  Others are unable to use their arms or legs.  Some children were born with conditions like Down’s syndrome, Autism or other birth defects.  Other kids were just in the wrong place at the wrong time and suffered an accident that left them “functionally limited.”

Whatever caused the limitation is immaterial.  The fact is that the “child” is dependent on the parent to provide care and supervision.

If your estate planning attorney sets up your trusts correctly, “Survivorship Life” provides the money to pay for someone to care for your “special needs child” when the second parent eventually passes away.


Not every attorney is an “ambulance-chaser.”  I have had the pleasure of knowing, and working with, several estate planning attorneys during my career.  Not one of them was a “shark.”  In fact, most of them were good, caring folk.  The only difference I saw between them and my clients was that the attorneys had a better knowledge of the “Estate Laws.”

If you have been able to accumulate a large estate or you have a child with special needs, I urge you to visit with an estate planning attorney who you trust.  They can give you guidance on the types of trusts and life insurance plans you need.

As an independent insurance agent, I am able to help you and your attorney find and obtain the type of life insurance that is most appropriate for you.  However, since both of these needs are governed by federal and state laws, I cannot stress that you only use an insurance agent after you have consulted with an estate planning attorney.

As the saying goes, we insurance agents only know enough about the law to be dangerous.  Regardless of what claims an insurance agent makes, don’t rely on him for matters of law.